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The United States is facing a new and simultaneous fiscal pandemic, with both household and government debt on unsustainable trajectories. The symptoms are clear, most notably in the form of a stubborn disconnect between economic conditions and national sentiment. Despite seemingly positive economic indicators such as GDP and job growth, many Americans remain anxious and feel that their financial security is on shaky ground.
Apparently, the roughly 18% price rise since President Joe Biden took office, caused by Democratic overspending in Washington, is compounding the pain of inflation.
But that’s not all. Despite some currently positive economic statistics, fear of a quick and sharp financial recession is another symptom of the fight against the financial pandemic. And this fever is driven by concerns that both the federal government and its households are borrowing too much.
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Therefore, the root of this fiscal instability lies in the effects of both private spending and government accountability. The New York Fed recently announced that total household debt reached $17.5 trillion in the fourth quarter of 2023, a new high. Household debt has soared to unprecedented levels as the cost of goods and services rises across the board.
Credit card balances alone increased by $359 billion under the Biden administration. This temporary prosperity is like building a castle on sand: unsustainable and risky. That is the trouble and pain of Bidennomics.
Living beyond your means by accumulating excessive debt can create a wall of personal insecurity. It forces you to start making unthinkable choices about how much you can afford each week and whether you can save and plan for the future.
Americans are increasingly living on borrowed time and money, and so is our government.
On February 14, Congressional Budget Director Dr. Phil Swagel testified before the House Budget Committee and reviewed the latest budget and economic outlook. This report clearly highlights an unsustainable fiscal path, particularly regarding federal debt and deficits.
The budget deficit in 2024 is projected to be $1.6 trillion, and will steadily increase thereafter, reaching a whopping $2.6 trillion by 2034. The cost of paying interest on the debt alone will exceed this year’s defense and Medicare spending. CBO notes that our nation’s annual deficit would create the highest level of debt relative to the size of the economy ever recorded in U.S. history.
Americans are looking for several ways to alleviate this financial disaster.
First, they want to know the truth. Leaders need to listen to these long-term issues and recognize that, if left unchecked, they can quickly spiral into an economic death spiral. We need to be on par with the people we serve.
Second, they want a plan. We need to propose ideas and solutions to get balance sheets back on track.
Finally, they call for political courage. Deep-seated dysfunctions impede rational paths to addressing these challenges. It’s been more than 20 years since Congress passed all 12 separate spending bills on schedule. That needs to change.
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The fiscal year 2025 budget that Biden will submit in March will do none of the above. No matter how you look at it, we’re likely to see more of the same, including catastrophic levels of taxes, spending, and borrowing. At a time when we need to be bold, this marks a new low for fiscal cowardice.
In stark contrast, House Republicans on the Budget Committee stepped up last year and advanced a 10-year balanced budget framework. This is a pro-growth blueprint designed to address these financial pandemics, and we plan to advance similar plans in the coming weeks.
Americans are increasingly living on borrowed time and money, and so is our government.
Our framework will advance policies that end Biden’s extravagance, straighten out a bloated bureaucracy, and reduce Washington’s debt burden by reining in runaway automatic spending once and for all. focused. We will root out waste and fraud in entitlement programs to ensure benefits reach the most vulnerable and needy.
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To support families, we will finalize the pro-growth Trump tax cuts and open opportunity for all. Our plan will give patients ownership of their health care, restore America’s energy advantage, and restore dignity to work.
As James Madison once warned, “The public debt is a public curse.” It’s time for individuals and the federal government to break free from the curse of extravagance and live within their means. By implementing smart policies, telling the truth about fiscal challenges, and showing political courage, we can restore fiscal health and build a more secure fiscal future for all Americans. can.
Click here to read more from our representatives.Ron Estes